Posts Tagged ‘ROI’

Week 2: Armchair Marketing and the Perceived Metrics Oxymoron

22
June
2009

Understanding a Modern Marketer’s Plight

Blake Bowyer
Media Program Analyst

One of the constraints of being in marketing: everyone thinks they know, but very few do. Seth Godin recently wrote in his blog that marketing is at its best when treated as both an art and a science. However, I’d expect that not many would consider marketing an art, much less a science. To most, marketing means advertising and advertising means Nike’s “Just Do It” and the Geico gecko – both disgustingly obvious, simple, and hardly worth the millions of dollars they cost.

However, that is the essence of marketing: it is the art of bringing social science to the public. No other discipline so frequently interacts with crowds – from the huddled masses to the small groups of the long tail – to communicate a message. Accounting, engineering, programming, and countless others happen behind the scenes with their own lingos and secret handshakes. Conversely, marketing’s primary objective is to interpret, relate, and measure messages and shake the hand of every person in the target audience (and even a few outside it).

Getting my M.S. in Marketing, this is a plea I make regularly. Even my title here at EyeTraffic Media – Media Program Analyst – isn’t one that spurs top-of-mind awareness from non-marketers. First off, it doesn’t have “marketing” or “communications” anywhere in it! Counterintuitive, right? Not exactly. As mobile, electronic, and other emerging media approach the forefront, marketers are given a stronger set of tools that reach out beyond the creative space. These tools are marketing metrics and they empower smart agencies by combining a stronger sense of ROI and performance with a much-needed level of accountability.

At EyeTraffic, we eat, sleep, and breathe metrics and encourage our clients to do the same. Though, that doesn’t mean we strip out all the fun stuff typically associated with marketing. The slogans, taglines, mascots, and jingles are still here, but we’re leveraging great tactics to make sure great creative doesn’t fall on deaf ears (or blind eyes). So, while it may seem like “marketing metrics” should fall under another department’s lexicon, they’re actually the boon of 21st century marketing agencies; and, most importantly, their clients.

After two weeks of telling people I work at a marketing firm and being asked what I think of the new, hilarious Whopper Jr. TV ads, I answer, “They’re funny, but they’re not positively impacting Burger King’s share of stores, share of sales, or recent sales growth.” The typical reply is, “Yeah, but they’re funny, right?” Yeah, they are funny and, just like marketing, humor is an art.  But, marketing’s also a science and humor alone won’t get results. Just ask the Pets.com sock puppet.

Survey Reveals Which Online Marketing Tactics Produced the Highest ROI in 2008

5
February
2009

MarketingSherpa’s year-end survey shows which tactics yielded the highest ROI and how marketers should adjust budget planning for 2009

Christine Pepin
Media Coordinator

During 2008 MarketingSherpa and Ad:Tech surveyed over 1,200 marketers to determine which online marketing tactics were used most often and how much money was spent on these various programs.  The results of the survey can help marketers adjust their budgets for 2009 to achieve the highest ROI for each program.

MarketingSherpa ROI vs. Budget in 2008

As seen in the chart above, email is the most commonly used tactic  by marketers and also ranks very high on ROI, as the budget required to successfully execute these programs is relatively small compared to other tactics.  The affordability of this particular program is likely the reason for 90% of marketers participating.  Over 50% of respondents report “great” ROI on paid search, more than any other tactic presented in the survey.  This is largely due to a marketer’s ability to track how many conversions are resulting from each dollar spent. 

After paid search, marketers reportedly spent the most on display ads, such as banners and buttons. This is very alarming because less than 15% of those surveyed indicated that this tactic was generating a good ROI.  With the economy forcing companies to cut back on spending, marketers may be shifting their dollars into more revenue generating tactics.

The chart below illustrates the importance of including search engine marketing programs in a marketing plan for 2009.  Paid search and search engine optimization rank among the top three highest ROI generators and are two of the most commonly used tactics. This chart also shows that poorly targeted online advertising, such as pop-ups and emails to rented list, yield a poor ROI.

MarketingSherpa Top ROI Generators

The survey also prompted marketers to indicate what tactics they planned to invest in during 2009.  The benefit of paid search remains clear, as 57% reported increasing spending on this successful ROI generator.  Despite last year indicating a low ROI for display ads, 29% of marketers will continue to spend money on traditional online ads.  This is very surprising; considering one out of three respondents indicated that they deliver a poor ROI and only 13% said they were great.  Perhaps the stresses of an ailing economy will force marketers more than ever to truly focus on the programs that produce the highest ROI.

MarketingSherpa Spending Projections in 2009

Media Budgets Decreasing, Online Marketing Spending Increasing

17
March
2008

Based on a recent study it is expected that direct marketers in the U.S. will decrease their media budgets and at the same time increasing spending on online marketing tactics.

Ryan Moss
Research Analyst

Target Marketing recently released its’ "Media Usage Forecast" Report in which nearly 25% of direct marketers from the U.S. who were surveyed said they are planning to cut their media budgets in 2008. Additionally, direct marketers said they would spend more money on customer acquisition compared to customer retention in the upcoming year. This is contrary to 2007 where there was essentially an equal amount of money spent on both areas.

Despite the expected decrease in media budgets, most respondents said they expected to increase the amount of money they spend on online marketing tactics. This trend is consistent with previous studies, which showed that marketers are more likely to reduce spending on other media before cutting online marketing spending. Marketers said they were going to focus on specific online marketing tactics such as E-mail (87%), SEO (72%), SEM (68%), Direct Mail (63%) and advertising on outside websites (62%).

Some other findings from the study include:

  • E-mail Marketing being named the best tool for customer retention
  • E-mail Marketing being selected as the second best tool in ROI for customer acquisition (Direct Mail was first)

Refer to the chart below to see which marketing tactics offer the stronger ROI for customer acquisition and customer retention.

Marketing Tactic with Strongest ROI for Customer Acquisistion vs. Retention by US Direct Marketers- eMarketer